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The electronic entertainment expo is nearing its final days and Microsoft has stolen the show! Microsoft introduced an add on piece of hardware for the Xbox360 called Natal. This is a next generation camera, sensors, and a mic that are also hooked up to some amazing software at the back-end. The result…interactive games and software that make the Wii look like a child’s toy (pun intended).

While Microsoft’s demo video was amazing, the application developed my Lionhead studios, Project Milo, really demonstrates what Microsoft and their partners have created…the “first generation” of “true” artificial intelligence (AI). Milo interacts with the user in a way that computers have been missing. He appears human. Now, while there will be many skeptics until its release, IGN and others have had the opportunity to sit down with project Milo and they have confirmed its functionality. Take a look at the project Milo video below, then take a look at the M$ video below that.